Africa’s former breadbasket is once again on the rise. Zimbabwe’s recent successes in boosting its economy and reducing inflation has some analysts predicting that the landlocked Southern African country could reach upper-middle-income status within the next five years.
Buoying Zimbabwe’s turnaround is a highly educated workforce, abundant critical mineral and agriculture resources, as well as recent economic and institutional reforms. What’s more, the country of 17 million is leaning into the green transition – renewables and electric vehicle battery manufacturing in particular – as a growth driver. New policies and regulations are helping Zimbabwe’s financial sector both become more sustainable and support climate finance.
Zimbabwe has worked to shake off its reputation of hyperinflation and economic ruin that befell the country after its financial crisis in 2008. Laying the groundwork for a more climate resilient economy will continue to help rebuild trust with overseas businesses and investors.
Open to business
Among the first reforms Zimbabwe passed to stabilize its economy was switching to the US dollar. Its economy is now about 80% dollarized. Its new local currency, the Zimbabwe gold (ZiG) is backed by… gold. These currency moves have created financial stability and increased investor confidence.
In order to encourage foreign investment, new technologies, create jobs and promote manufacturing, the government removed a long-standing requirement for local ownership through its 2020 “Open to Business” policy. Other reforms include tax exemptions and duty-free importation for renewable energy equipment. The government is also encouraging EV adoption by lowering import duties 40% to 25% on electric vehicles.
The Victoria Falls Stock Exchange, which trades in US dollars, was established in 2021 to attract foreign investment. VFEX allows for free repatriation of funds and special economic zone protections. VFEX exists alongside the Zimbabwe Stock Exchange, or ZSE, and they share the same parent holding company.
For investors curious about engaging in Zimbabwe, opportunities exist in microfinance, banking and credit union lending, asset finance, listed equity, fixed income, venture capital, and project finance.
Microfinance institutions have been key to advancing financial inclusion in Zimbabwe, providing low-income populations and microentrepreneurs access to credit, savings accounts, and insurance. There are 277 operating MFIs in Zimbabwe, offering small businesses loans, and agriculture, housing and green loans. The Zimbabwe Microfinance Fund, which serves about 20 financial institutions including some depository credit unions, has a renewable energy window that supports micro and small businesses and smallholder farmers requiring solar energy systems.
Many banks, such as the National Building Society, offer solar energy loans.
Sustainable banking is trending generally in Zimbabwe, with the Reserve Bank of Zimbabwe launching a Climate Risk Management Guideline in 2023. The guideline is Zimbabwe’s first binding framework that requires banks to integrate climate risks into credit decisions, governance and disclosures. Banks must now run climate-scenario analyses, consider climate risks, and publicly disclose exposures.
RBZ has also been supporting the banks to become sustainability certified. ZB Bank was the first financial institution in the country to attain the Sustainable Standards Certification Initiative certification, awarded by the European Organisation for Sustainable Development.
Facilitating climate lending
The main challenges in Zimbabwean lending are the prominence of short tenors and high interest rates. These affect the cost of climate loans, such as solar with storage, hybrid and electric vehicles, and solar irrigation systems. A 12-month loan with a 15-18% interest rate is the norm for banks; a longer-duration loan of 24-36 months increases affordability but can be a stretch for many depository institutions. MFIs can charge as much as 10-12% monthly interest rates for a three to 12 month loan.
The need for long-term deposits to enable longer-term tenors is apparent when looking at climate-related project finance. Larger scale solar projects tend to have an eight to 10-year payback period and cost roughly $0.8 million per megawatt. There is a need for credit enhancements, such as long-term deposits and guarantee funds, to enable lenders in Zimbabwe to provide better lending terms.
Consumer confidence in banks is another challenge. The 2008 crisis dissuaded the general public from placing their savings in depository institutions. Fintech platforms command more customer confidence than established banks. There are many fintech platforms in Zimbabwe, such as Ecocash, InnBucks, O’mari (run by Old Mutual), and OneMoney. With more support, the fintechs could extend their offering to climate products.
Climate venture capital
In 2025, Zimbabwe’s Treasury launched the National Venture Capital Company of Zimbabwe to support startups in sectors including renewable energy and sustainable manufacturing. This complements the ecosystem of VCs and other risk capital funds that already exist in Zimbabwe. Vakayi Capital, for example, invests between $100,000 and $1 million in companies in sustainability-linked sectors such as housing, healthcare and education.
Chai Musoni, Vakayi’s founder, notes that climate-oriented startups tend to be too early for Vakayi, however, which requires a minimum of two years cash generation. Climate-oriented enterprises that have different business models to startups, meanwhile, tend to need inventory finance rather than business finance.
Public budget institutions, such as EEP Africa, may be available for early-stage clean energy endeavors, but startups then struggle in finding growth capital to sustain and scale their operations. VC funds in Zimbabwe would benefit from investor support for climate carve-outs and special purpose vehicles dedicated to plugging these gaps.
Companies that are able to cross those gaps have a viable pathway to giving investors an exit: Zimbabwe’s ZSE and VFEX stock exchanges. There is one climate company listed on the ZSE, CAFCA Limited, which manufactures cables used for electricity transmission.
On the project finance and private equity side, Zimbabwe launched its first Renewable Energy Fund in 2024, focusing on solar energy, hydropower, biomass energy, and battery storage. The fund started with $17 million in seed capital and has grown to $45 million. It is still actively fundraising toward its target of $100 million. Managed by the pan-African bank and insurer Old Mutual, the fund accepts both retail and institutional checks from domestic and international investors. Projects supported so far include a 10-megawatt solar plant for a dairy producer in northeast Zimbabwe.
Energy transition
Zimbabwe’s priority green economy sectors are renewable energy – for households as well as commercial and industrial users, agriculture, and mining. This appears to be the most ready climate investing opportunity in the country.
Hydropower is already readily available. Since 2022, the Zimbabwean government has issued private-sector generation licenses totaling 7.1 gigawatts, including for the $4.5 billion Batoka Gorge Hydropower project.
Renewable energy growth is dominated by solar, however. Solar energy generation is set to grow from 5% today to 27% by 2030. There are already many options available for home solar adoption especially, including from Angaza, Azuri, Solarpro, SoshoPay and Ecowealth.
Isaiah Nyakusendwa, who leads the Renewable Energy Association of Zimbabwe, shares that data collection is not robust; factors like how solar panel imports are tracked – by weight, rather than watt capacity – obscure the real adoption picture. “The official figures underestimate solar uptake in the country.”
The mining sector is also increasing its demand for distributed renewable energy. Zimbabwe is home to some of the largest lithium reserves in Africa. It is set to move beyond ore exports and begin regional EV battery manufacturing, signaling an emerging investment opportunity.
Zimbabwe can also access the $1.3 Billion Regional Transmission Infrastructure Funding Facility, managed by Climate Fund Managers, which supports interconnection and cross-border energy transmission in Southern Africa. Zimbabwe is home to the Southern Africa Power Pool, which strengthens the Zimbabwean grid to take on variable renewable energy sources. That will open new opportunities for investments in renewable energy.
Zimbabwe’s land is also a critical climate-resilience resource and opportunity, contributing to the livelihoods of over 60% of Zimbabwe’s population and 15% to the country’s GDP. Though sustainability-focused investors can find opportunities in supporting Zimbabwe’s cotton production and high-value horticulture products, such blueberries, peas and peppers.
“The maturing policy landscape and enabling framework for climate finance,” notes Harare-based climate finance analyst Veronica Jakarasi, “offer a strategic fit toward sustainable development, green jobs creation and poverty eradication in Zimbabwe.”
